Friday, January 4, 2013

Kunstler Victory Lap?

I see Jim Kunstler is out with his annual forecast. For the record, I think most of his predictions are terrible (expept for drought). Of course, if you make the same prediction every year (gold up, Dow 4,000, major earthquake), eventually you are going to be right. What surprises me, though, is why he’s not taking a victory lap of sorts. Rather than make predictions, why not just point out that in the past year:

Cities grew faster than suburbs for the first time in a hundred years:

Americans are driving less, and the trend is significantly down.

Malls are being abandoned from coast to coast and new construction is down.

Graduate school students are dropping out and taking up farming.

Gas is very expensive, even in a depressed economy.

New housing starts are down indicating a floundering suburbia.

There have been furtive attempts to get high speed rail going.

The average age of cars on the road hit an all-time high.

The Eurozone is still a basket case.

Doctors are now concerned about viruses being spread to more temperate regions by global warming.

At least some global trade is reverting to sail.

Municipal bankruptcies are endemic.

Americans are increasingly subscribing to a demon-haunted world of a young earth created by God from scratch, and a medieval world view of social relations.

So instead of making another round of dire predictions, maybe he should take a little credit for the small claims that he has made in the past that seem to be starting to play out. I know I would. Still no pirates showing up on the West Coast, though.


  1. I'm with you on this one. He should be trumpeting his small successes instead of doubling down on his particular brand of doom that he thinks will yield the World Made by Hand he (thinks) he wants.

    I plan on responding to his forecast, too, in particular his attempt to puncture the effects of fracking on increasing oil production. He seems to be really out of step with a lot of people who realize that, while peak cheap conventional oil has indeed happened on schedule, peak unconventional oil, and even peak total oil, may be at least a decade off. Until then, I'll use the reblog function of Blogger to boost your signal at Crazy Eddie's Motie News.

  2. Thanks much. I'll note that when I speculated about the Peak Oil community getting predictions right, it was those who emphasized that we would continue to go after ever lower-grade sources of fossil fuels who got it right, not those who predicted armegeddon.

    The fracking issue is a complicated one. I question those who call it a bubble and argue that the investment money simply won't be there. Certain commentators point out, on the one hand, the ephemeral nature of investment money as just keystrokes and pieces of paper. Yet, on the other hand, they claim that there will not be anough investment capital to continue fracking. I find these ideas contradictory. If this is the only remaining was to increase energy, by definition it will be invested in and will deliver large returns. Anything society cannot do without will continue to generate large returns in times of scarcity as people will pay whatever it takes to get it (there's my investment advice in one sentence).

    There are, however, very real biophysical factors at play, such as you must deduct the cost of the energy it takes to get at the stuff as well as the environmental destrcution it wreaks both directly and indireclty via climate change in the final analysis, in order to arrive at the net benefits of fracking. Economists refuse to do this, of course, but reality will make that calculus for us. This is where the real action lies. But I do not believe we can run out of money for investment any more than sports teams can run out of points during a game. It's a common misunderstanding, unfortunately.

    1. " But I do not believe we can run out of money for investment any more than sports teams can run out of points during a game. It's a common misunderstanding, unfortunately."

      Money as you rightly point out cannot run out a it is an abstract idea. Numbers on paper or digits on screens are limitless. However money spent is a call on resources which are not limitless. It matters not what the money is spent on, ther is no limitless capital resource bucket to keep calling on fro fracking or anything else. At some point, resources will either be allocated to the activity or they won't. The frackers can print as much money as they like but if the drillers or machinery makers don't accept that as legitmate payment then there is no investment.

      Money is simply a mechansim by which society allocates its energy resources - whatever they happen to be. Print too much money and allocation will go astray. Don't print enough, the system gets gummed up and nothing happens. The banks are the printers of the money and the borrowers spend it on the resources. Markets will balance the the supply and demand by altering the prices of things relative to what is beneficial for the system as a whole.


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